Question
Scenario #3 (at the CPA tax preparation firm that you own during busy tax season!) (Labor Variance Exercise) You pay your employees by the hour
| Scenario #3 (at the CPA tax preparation firm that you own during busy tax season!) | ||||||
| (Labor Variance Exercise) | ||||||
| You pay your employees by the hour (of work that they "clock") | ||||||
| Last week you paid your employees $1,200 for 80 hours of work | ||||||
| 45 tax forms got prepared last week. | ||||||
| The standard time expected per tax form is 2 hours. The standard rate of pay is $20 | ||||||
| per hour. | ||||||
| Calculate the labor rate and efficiency variance for last week's output | ||||||
| (including whether these variances are | ||||||
| favorable or unfavorable) | ||||||
| Hint: Set up the 3 columns, AH x AR, AH x SR, SH x SR 1.What you feel could have been the root cause of each of the variances, i.e., price and quantity if you were assigned a materials scenario (#1 or #2) or rate and efficiency if you were assigned the labor scenario (#3) 2.Based on your answers to 1) above, what would you, as a manager or owner, do about it? (Be very specific, | ||||||
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Financial Accounting Introduction To Concepts Methods And Uses
Authors: Clyde P. Stickney, Roman L. Weil
11th Edition
9780324222975
